Q3 Earnings and the Nifty

Q3 Earnings and the Nifty:
Earnings releases are expected to begin later this week and early next week. Several analysts have an opinion that the expectations from the Q3 earnings are already priced into the Nifty.
Advance tax numbers have been released. Commercial vehicle sales data has been released. November trade data shows merchandise exports declining at a decreasing rate and non-oil imports increasing at a decreasing rate. Given the information already available there are several expectations related to Q3 earnings.
The auto sector, auto ancillaries, real estate, metals, etc are expected to show very bad results for Q3. The IT services sector will show severe topline weakness, combined with higher margins from layoffs of workers on bench and a stronger dollar; it’s possible that dollar hedges resulted in Treasury losses for them.
My opinion is that the earnings are not fully priced into the Nifty. Once the results are actually out, there will be a bearish impact on Nifty levels. Consider the example of how bullish news flow impacts the market. Before the Friday evening announcement of a second government stimulus package there were already expectations around it. The RBI’s 100 basis point cut in reverse repo rate to 4%, and 50 basis point cut in the Cash Reserve Ratio did act as a positive surprise for the market. At the same time, the real estate, infrastructure, exports, sectors were disappointed with the stimulus package and more was expected on those fronts. So the actual news was different from what was expected both ways. The market rallied yesterday with higher volumes on news of the stimulus package. My view is that the simpler story applies. Though the market was expecting bullish news, when that news was actually out; it rallied.
Today the market is adjusting to Q3 earnings expectations. Once the data is actually out, there will be a Nifty fall.
Given the technical analysis of the Nifty, that fall might take us below 2500 to the next trough, possibly to around 2200 levels.